Keynote Address | Eddie Yue | Hong Kong FinTech Week 2024

Summary

At the ninth Hong Kong FinTech Week, the speaker outlines Hong Kong's commitment to shaping a vibrant, innovative financial ecosystem. Key themes include the importance of using technology, such as tokenization and AI, to solve real-world problems and improve services like cross-border payments and SME financing. Emphasizing boldness, collaboration, and regulatory innovation, the speech highlights ongoing projects and future strategies aimed at fostering a borderless, data-driven financial future. With a focus on global partnerships and a visionary approach, Hong Kong is positioning itself as a leader in the rapidly evolving FinTech space.

Takeaways

• 😀 The theme of the 9th Hong Kong FinTech Week is 'Illuminating New Pathways in Fintech,' reflecting the transformative acceleration of technology in the financial sector.
• 😀 The overarching vision is to nurture a vibrant fintech ecosystem, similar to an orchestra where all players, from startups to established institutions, contribute to the whole.
• 😀 Innovation is not an end in itself, but a means to solve real-world problems, such as improving payment systems and banking services for SMEs.
• 😀 Boldness in driving innovation is crucial, exemplified by projects like tokenization and sandbox initiatives, even at early stages.
• 😀 Collaboration is key to fintech progress, with partnerships across borders and sectors enabling shared knowledge and collective growth.
• 😀 Tokenization, distinct from crypto assets, is seen as a transformative tool for digitizing ownership of real-world assets and improving market inclusivity.
• 😀 Tokenization could revolutionize trade finance by reducing paperwork, improving fraud prevention, and providing real-time tracking of shipments on the blockchain.
• 😀 Green finance is another focus area, with tokenized carbon credits and blockchain solutions helping address issues like double-counting in carbon trading.
• 😀 Hong Kong is actively fostering AI and data-driven approaches, such as using AI in risk assessments, anti-fraud detection, and customer interactions, while maintaining regulatory standards.
• 😀 The HKMA's initiatives, such as the AI sandbox and cross-jurisdictional data sharing, aim to accelerate responsible AI adoption and facilitate global fintech integration.
• 😀 Looking ahead, Hong Kong’s fintech journey will focus on tokenization and AI, aiming to create a borderless, interconnected fintech ecosystem that drives innovation and economic progress.

Q & A

What is the theme of the 9th Hong Kong Fintech Week?

The theme for the 9th Hong Kong Fintech Week is 'Illuminating New Pathways in Fintech,' focusing on shaping the future of finance through innovation and technology.

What is the overarching vision for Hong Kong's fintech ecosystem?

Hong Kong's overarching vision is to nurture a vibrant fintech ecosystem, with players working together like instruments in an orchestra, each contributing to a collective goal of innovation and growth.

What role does collaboration play in advancing Hong Kong's fintech strategy?

Collaboration is key in advancing Hong Kong's fintech strategy. By forming cross-border and cross-sector partnerships, different players can pool resources and expertise to create solutions that drive progress across the financial ecosystem.

What are some examples of recent innovations in Hong Kong's fintech ecosystem?

Recent innovations include the integration of Hong Kong's Faster Payment System (FPS) with Thailand's PromptPay for seamless cross-border payments, and the *Cross Boundary eCY Pilot*, which allows users to top-up digital wallets for cross-border transactions.

How is tokenization transforming the financial industry?

Tokenization allows the digital representation of assets on a blockchain, making it easier to trade and transfer ownership of both financial and real-world assets. This technology is enhancing efficiency, transparency, and accessibility in markets like trade finance and green finance.

What is the difference between tokenization and crypto assets?

Tokenization and crypto assets are often confused due to both using blockchain technology, but they serve different purposes. Tokenization records value and ownership digitally, making it applicable to real-world assets, while crypto assets are speculative digital currencies.

How is Hong Kong using tokenization in trade finance?

In trade finance, tokenization is being used to replace paper documents, such as bills of lading, with tokenized digital versions on the blockchain. This enhances efficiency, reduces fraud risk, and facilitates easier funding and asset tracking.

How can tokenization contribute to sustainable finance?

Tokenization can drive sustainable finance by enabling the transparent and traceable trading of carbon credits and other sustainability-related assets. For instance, tokenized carbon credits traded on the blockchain can address issues like double counting in carbon markets.

What is the role of AI in Hong Kong's financial future?

AI is transforming the banking sector in Hong Kong by enhancing operational efficiency, improving customer experiences, and supporting data-driven decision-making. The Hong Kong Monetary Authority (HKMA) is committed to promoting responsible AI adoption in the financial industry.

What is the Gen AI Sandbox, and how does it support AI innovation?

The Gen AI Sandbox is an initiative launched by the HKMA in collaboration with Cyberport, providing a platform for banks to pilot AI use cases in a risk-managed environment. It offers technical support and targeted supervisory feedback to encourage responsible AI innovation.